The $7,500 electric vehicle purchase tax credit made available to consumers via the Biden Administration's Inflation Reduction Act helped electric vehicle sales surge by 43% this August compared to last, and this trend is expected to continue.
Electric vehicle sales are rising worldwide, with a steep incline in the US this year. The recently passed Inflation Reduction Act, which offers incentives to consumers, is expected to boost them even further. The Inflation Reduction Act (IRA) extends the light-duty electric vehicle tax credit of up to $7,500 until 2032 for consumers.
President Biden took to Twitter to show his delight at the reception of his newly-passed bill stating, “Since I took office, electric vehicle (EV) sales have tripled. Every vehicle sold is a win against climate change.”
Massive Increase in Electric Vehicles
There were 70,871 electric vehicles– a mix of electric and hybrid- sold in the United States in August. According to the US Department of Energy, this number is a 43% increase from August 2021. Last month, electric vehicles accounted for 6.28% of the total light-duty vehicle sales.
The Biden administration has also passed the Infrastructure Investment and Jobs Act 2021, which includes $7.5 billion for a network of 500,000 EV chargers, $7 billion for critical minerals for domestic manufacturers of EV batteries, and $10 billion in subsidies for jurisdictions buying electrical public and school buses. Even though President Biden is happy that the new Inflation reduction Act is being received well, the increase in EV sales owes some credit to high gasoline prices as well as his administration policies.
Some analysts believe these subsidies and global inflation will increase electrical vehicle sales dramatically over the next number of years. Garrett Fitzgerald, senior director of electrification at Smart Electric Power Alliance, stated, “The tax credit itself decreases some of the pricing issues that we’ve seen with electric vehicles being at a higher price point. But I think, more importantly, the IRA’s focus on electric transportation has demonstrated a commitment to this transition, and the auto and EV charging companies and providers are jumping in feet-first to this transition.”
More People are Happy to Buy Electric
It has been forecast that electric car sales could double again in the next year, meaning that 10% 0f car sales in the US in 2023 could be electric or at least hybrid.
Not every customer is happy about changing their car from gas to electric. There is a variety of reasons why a consumer would not pick an electric car, including demographics, economics, political affiliation, and the vehicle’s make and model. But in the past year, the variety of make and models now available in electric cars has doubled, and it is set to double again, which makes them more desirable for the more reserved consumer.
Whatever the reason for the increase in electric cars, it is quite a significant step forward for America in the fight against climate change. President Biden’s administration and global hyperinflation have created the perfect storm for a massive shift into the new technology, and to be honest, everyone should be grateful. The faster we take climate change and our own carbon footprint more seriously, the quicker we will save our planet.